Gold applying Bollinger Bands® with channels for Support, Resistance Reversal AreasNov 09, 2020
Below article explains application of Bollinger Bands along with Elliott wave and channelling concepts on MCX Gold.
Identifying important resistance and support areas through basic channeling technique.
MCX Gold Daily chart:
Gold seems to be consolidating since quite a long time and trading within the broader range of 49450-52400 levels. During such trading markets, Bollinger bands works fabulously well. As you can see from the chart, the upper and the lower end of the Bollingers are providing a descent support and resistance to the prices. Prices are moving precisely within the band. Also, the Band has narrowed indicating that a decisive break on either side will emerge into a trending move.
Channels are the simplest yet effective tool in order to know the important reversal areas. Yesterday’s sudden down move was quite quick and shocking. But if carefully observed, prices have reversed exactly from the channel resistance which was also the resistance provided by the Bollinger band and halted exactly near the channel support.
As per Elliott wave perspective, the metal is currently moving in corrective wave (iv) red and we are yet to see any new leg of upside.
The above research proves that sometimes a simple technique can save you from entering in wrong direction. It rings a bell of caution in terms of wrong entry and exit in the market.
To know the important reversal areas for Gold, Silver, Crude and Copper subscribe to “The Commodity Waves Short Term Update” and for more information visit here
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